Fightback
Needed Against GM Threats
Jobs, Health Care to Be Slashed in Auto

by Andrew Pollack

General Motors bosses hit the
United Auto Workers with a double-whammy in early June. First they announced
they were cutting 25,000 jobs, then they demanded billions in health care cost
savings from both active and retired workers by the end of June—savings which
they threatened to implement unilaterally if an agreement wasn’t reached. They
claim they could slash retirees’ benefits without reopening the contract, which
the UAW denies. But UAW leaders are promising to give health care concessions
that they believe are permitted by
the contract.

In an industry where plant
closings, layoffs, outsourcing, and job combinations have flourished for
decades, the companies have been saving billions on health care all along by
relying on overtime rather than hiring new employees for whom it would have to
provide benefits. But now that corporate America has latched on to health care
costs as its new all-purpose excuse for squeezing more out of workers to rescue
its failing profits, even that isn’t enough for the Big Three (GM, Ford, and
Daimler-Chrysler).

Early indications are that UAW
President Ron Gettelfinger is ready to throw in the towel on health care. But
he’s no dummy: he—and the local officials he’s primed for this maneuver—are
combining “reasonable” rhetoric, about understanding the need to help GM, with
“tough talk” warning GM against unilateral moves, including implied threats to
strike. All of this is designed to come up at the last minute with health care
concessions that will be just enough to stop GM from demanding that the contract
be reopened before 2007.

The UAW VP in charge of GM, Richard
Shoemaker, is also talking out of both sides of his mouth. He has already come
forward with his own helpful suggestions for retiree health care cuts totaling
about $12.7 billion. Yet he told local officers at a June 9 meeting laying out
the line to take back to members: “If GM does anything unilaterally, they’ll
have a very hard time making automobiles in this country. You can go back and
tell your membership that.”

Autoworkers are resentful at being
asked to give back benefits that they rightly feel they’ve earned by decades of
foregoing wage increases in return, supposedly, for more secure retirement and
better health care benefits. Even the much-bandied-about claim that it costs GM
$1,500 per car to provide health care is based on questionable calculations.
UAW dissident Greg Shotwell points out that the supposed health care cost of $1,500, based on dividing the number
people covered into the value of vehicles sold, does not take into account the
fact that “retirement benefits are covered by a trust fund, not vehicle sales.
What’s more, the size of that trust fund decreased dramatically NOT because of
increased health care cost, but because it was used [by GM, unilaterally] for
capital investments.”

GM is not just stealing
already-earned money; it’s playing with people’s lives. One retiree told the
media that if benefits are cut, he and his wife may have to skip medications
for high-blood pressure, arthritis, and allergies.

But instead of mobilizing the
members’ anger, UAW leaders are calling for management and investors to “share
the pain” by taking reduced salaries and dividends. Plus they’re questioning
whether GM needs as many givebacks as it’s demanding. Gettelfinger said GM had
not presented him with enough information to convince him of the severity of
the financial situation. While its debt is in the hundreds of billions, and is
rated at junk levels, that debt comes due over several decades.

Gettelfinger and others also point
to management’s responsibility for poor product choice and design and costs
from recalls. “To us, product is No. 1, first and foremost,” he said. What’s
more, he said of GM, “they are paying out dividends; their equity in their
stock is up a lot; they have a lot of cash on hand; they’ve stated that they
have no intentions of going into bankruptcy…that means they will expose us to a
lot of internal information that we normally would not have access to…If
somebody makes a claim about how bad things are, then I’m assuming they want to
support that and back it up, and we’ve got experts in place that are taking a
look at those kinds of issues.”

Open
the Books

Of course what’s really needed is
the ranks’ expertise: the bureaucracy’s “experts” are used to coming up with
the numbers Gettelfinger wants to justify concessions. The union should be
demanding that ALL company ledgers be opened—and that the members have a chance
to do their own analysis of where GM’s hiding the money.

But despite their discounting GM’s
claims of need, Gettelfinger and Shoemaker still said they were prepared to
work with the company to find “mutually agreeable ways to reduce costs in health
care and other areas.” In fact talks on health care cuts began weeks before the
company board meeting at which, according to media reports, GM President
Richard Wagoner was told to attack the union.

Another plea of the bureaucracy is
for more time to put the concessions over on the members: Oscar Bunch,
president of a Toledo
local, told the press that “the [GM] board was mandating things that he
couldn't do” within the time frame specified by the company. Eldon J. Renaud,
the president of a union local in Kentucky
said, “It’s hard enough for us to agree to concessions without forcing
something down our throat. It takes time to do this.” Time to force it down the
members’ throats, that is.

And finally union officials are
pleading with management to be reasonable, saying a strike would only hurt both
the union and the company.

GM’s claimed weakness in the face
of competition could be turned into a leverage point for the union. Wall Street
analysts say unilateral cuts by GM are unlikely since it could result in a
strike at a time when GM is preparing to launch important new additions to its
vehicle lineup. This may or may not be an accurate prediction of GM’s
willingness to attack; but certainly the possibility of losing billions won’t
help their “competitive” standing much.

(Of course the talk about the Big
Three’s “competitive” woes in the U.S.
ignores their global reach: GM, for instance, has 388,000 employees in 50
countries, and its parts spin-off Delphi has
211,000 employees in 42 countries. In 2003, GM reported profits of $437 million
from China,
the world’s fastest-growing market.)

The official UAW goal is to help
“our” companies, proven most recently in the health care sphere with
concessions in March to Chrysler, which won tens of millions in savings when
the union allowed it to exercise a little-known and never-used contract
provision negotiated in 1982 that lets the company raise deductibles and
co-payments if it can prove health care costs have risen substantially. When
this happened it was predicted that GM and Ford would make similar demands. But
after the union officials had rolled over at Chrysler, it was never in the
cards that they would prepare union members at GM and Ford to defend their
health care rights.

One Wall Street analyst says investors
are wondering how to profit from GM’s troubles. Possible scenarios include
someone like super-rich investor Kirk Kerkorian buying GM, terminating UAW
retiree benefits, selling GMAC Mortgage, or even all of GMAC, and thus
acquiring GM and the core of GMAC for a bargain-basement price of a few hundred
million. In this scenario the stockholders would get huge dividends from the
cash garnered in the sale—and a stripped-down GM could demand more concessions
because its most profitable arm was gone.

But this corporate swashbuckling is
countered by union pleas for reason and understanding. “Right now, we’re doing
everything possible to help G.M., because it helps us too. We don’t want G.M.
to go under,” said Don Swegman, president of an Indiana local. “As long as what they want to
do is laid out within our agreement, it’s quite all right to do.”

Troubles
at Delphi, Visteon

After GM made its demands, GM spin-off
Delphi demanded its own concessions. In late
June UAW leaders from 22 plants met with top Delphi officials to discuss
measures such as closing or selling plants, offering buyout packages, and
shifting more health costs. Cited as proof of need were not only GM’s demands
but the recent acceptance by the UAW of the Ford-Visteon restructuring. A local
union president said, “I’m sure whatever they do for General Motors, they’ll
turn around and do for Delphi.”

In fact union officials at Delphi plants had been invited to the earlier meeting of
UAW GM reps precisely because Gettelfinger knew similar demands would be made. But
rather than use that meeting to plan company-wide (much less industry-wide)
resistance, it was designed to strategize about how to prepare members for
givebacks. Shoemaker said: “Delphi’s problems were
just as significant (as GM’s) and at some point would have to be addressed as
well.” Delphi has already said it plans to cut 8,500 jobs this year and idle
some U.S.
plants.

In May the UAW agreed to let Ford
parts spin-off Visteon restructure by sending workers and plants back to Ford.
Most of those plants will then be closed and buyouts offered to 5,000 autoworkers,
with the result that Visteon’s North American manufacturing operations will be
even more concentrated abroad. As at GM, union officials accept it stoically: “Obviously,
we’re all very apprehensive about what’s going to take place,” said Eugene
Morey, the president of an Ypsilanti
local. “I think we did pretty well when you consider that Visteon was on the
brink of going bankrupt.”

But workers transferring back to
Ford are going to a company that an industry analyst says “is in no position to
absorb additional labor costs. There’s no real place for them to transfer in
Ford.” Ford will sell most of the repossessed plants—which surely means that most
of those workers will either be laid off or have their wages and benefits
slashed drastically. And the entire remaining workforce at Visteon will be in
the lower tier negotiated in 2003.

When Delphi
and Visteon were spun off (in 1999 and 2000 respectively), the union maintained
the wage parity that had existed among all Big Three plants, whether assembly,
components, or parts. The auto industry has always had a multi-tier structure,
with non-Big Three supplier companies at lower wage rates. But in the 1980s and
1990s the Big Three closed some of their own parts plants and increased
outsourcing from nonunion suppliers here and abroad, and the union did
virtually nothing to organize those nonunion plants. Instead they gave back
more of their own members’ money in the hope that this would protect existing
members’ jobs and wages. Meanwhile the union was allowing management to play
off assembly plants against each other in a “whipsawing” process whereby locals
fought each other over who would get to produce a given line by proving they
could give more concessions to the company.

The net result of this failed
strategy was to let Delphi and Visteon
management claim that their wage rates were “uncompetitive” with other
suppliers. Finally in the 2003 contract UAW officials obliged them with a
drastically lower wage tier for new hires of $14 to $16 an hour—compared to the
$24 to $26 range for current workers (and new hires will never reach the top
tier). Although assembly and parts workers voted on the same contract,
lower-tier wage rates weren’t agreed on till after ratification and those affected
had no vote on them.

Ironically the shuttling of workers
from Ford to Visteon and back is actually proof that the bosses’ claims about
individual corporations’ needs are never as set in stone as they claim. In some
industries spin-offs mean total separation between the parent and offspring. In
others—such as the “double-breasted,” nonunion subsidiaries in trucking—ownership
remains the same even if corporate boundaries are erected. At Ford/Visteon, the
ties remained even closer: the UAW insisted that workers have the right to go
back to Ford if necessary (and Ford all along subsidized Visteon financially).
So there’s nothing inherent in auto industry structure preventing the union
from making even broader, cross-company demands for job protection, portability
of benefits, etc.

Also included in the 2003 pact were
givebacks from members in core assembly plants, such as more “team concept,”
more combined job classifications, “flexible work schedules,” etc. Most of these
givebacks were left out of the scanty contract summaries provided to members.
The contract also furthered the whipsawing trend by encouraging locals to make
work rule changes if new production is moved into the plant.

This defeat at Delphi
and Visteon was prepared by decades of failure to organize nonunion parts
plants. Instead of aggressive organizing the union has sought management
“neutrality,” and has done so by proving its willingness to be a “reasonable”
partner. UAW Organizing Director Bob King said when Gettelfinger gave him the
post he was instructed to make sure suppliers “were a value-add”—that is, that
unionization would make the plants more profitable. “If we want to keep
manufacturing jobs in the United
States, which is a major objective of the
UAW, then we can’t be fighting management. If we have an adversarial
relationship, then we’ll see more work go overseas.”

Needless to say, this logic lets
management play the union for a sap and provides potential members with little
incentive to sign up: why join a union that wants to give away wages, benefits,
and jobs? And in the end jobs go overseas anyway.

The union’s dismal organizing
record was combined with betrayal of struggles at existing plants. At Accuride
the union abandoned workers after a four-year lockout, voluntarily giving up
its right to represent members after earlier trying (and failing) to force them
to return to work. Throughout, scab parts made at Accuride fed union-organized
assembly plants. And at American Axle and Manufacturing, another company spun
off from GM, the UAW “International” leadership helped management impose a
three-tier system (using one of their favorite tactics: “vote till you get it
right”). Nor, despite the growing internationalization of production and sales,
did the bureaucracy establish effective ties with autoworkers in other
countries.

So UAW members at GM face this
June’s job and health care cutbacks with a divided workforce and a union
bureaucracy that has fostered that division by its collaborate-with-management
strategy. A worker in one UAW parts plant in Alabama summed it up best, telling reporters
that he has “had enough of the union agreeing to cuts under the banner of
protecting jobs. ‘The only thing (the UAW has) done for us members is give
concessions to the automakers under the auspices that it’s going to make them
competitive. And it hasn't worked.’”

Fightback Potential Shown at Visteon, Flint

In the last few years members have
several times shown their willingness to fight—and have taken advantage of the
new “just-in-time” production process to launch crippling strikes where one
plant shuts down most or all of an entire company. At one Visteon plant
(Bedford) just last year there were pitched battles with local and state cops
and private security guards, cars overturned and set on fire, and blocking of
scab buses. The strikers were members of International Union of Electronic
Workers (IUE-CWA) Local 907. But UAW members in the region, including GM
workers, came to the picket lines to show their support. UAW officials, however,
refused to organize solidarity. This was due in no small part to the fact that Bedford jobs were slated to be moved to a UAW-organized
plant in Michigan (in fact removal of
equipment from Bedford
was the spark that touched off the strike). Workers, having seen GE, RCA, and
other companies shut down plants even after wage cuts were granted, decided to
resist. (In the end the IUE “International” officialdom stepped in and imposed
a settlement.)

At GM itself workers vividly
remember the eight-week long strike at Flint
in 1998. Launched over subcontracting and other issues affecting job levels, it
idled as many as 193,000 GM workers, shut down 25 of 29 North American assembly
plants, and cost the company an estimated $2 billion. The members stood up to
GM efforts to get the strike declared illegal, and attempts to block
unemployment benefits and to force the union into arbitration.

Workers today say “Remember Flint,”
by which they mean remember the union’s ability to inflict pain on the company.
But the lesson of Flint
for the bureaucracy was the exact opposite: the need for more communication and
collaboration with the bosses. Shoemaker believed that the strike created a “new
process, with more frequent discussions with people at the highest level…to be
sure we can resolve things before we reach a crisis.” This refrain was repeated
in June by Gettelfinger and Shoemaker: “It is in the best interests of all GM
stakeholders for the UAW and GM to work together, to maintain the solid working
relationship that we have worked so hard to build since 1998.”

Wider
Fightback Potential

Since GM has chosen health care as
a key battleground the ranks have another potential ally on their side: the
entire working class. Virtually all organized workers have seen cutbacks in
their own health care, with higher premiums, deductibles, and co-pays, and this
has been the central issue in almost every strike of the last decade. The
unorganized sector of the working class has keenly felt the cutbacks in
Medicaid and Medicare—or the lack of any health insurance at all (for over 45
million people).

What’s more, since GM is particularly
targeting retirees’ health care benefits, the union could appeal to millions of
retirees already enraged by, and many of them mobilized against, recent attacks
on Social Security and Medicaid. The recent termination of pensions in the
airlines makes clear the need for a class-wide defense of retirees’ rights.

When talking out of the
noncollaborative side of his mouth, Gettelfinger says GM’s health care cuts
won’t solve the broader problem and that a society-wide health care fix is
needed. But of course neither he nor any past UAW president has ever mobilized
the membership behind a demand for a single-payer, universal health care system
(such as the Labor Party’s “Just Health Care” campaign).

It’s interesting to note that GM
bosses in Canada
actually support the single-payer health care system that exists there! On the
surface this is because of the “competitive advantage” it gives them: “The
Canadian (health care) plan has been a significant advantage for investing in Canada,” says GM Canada spokesman David
Patterson—and in fact production has been shifted from Detroit
to Windsor for
just that reason. But the deeper reason is that Canada’s
labor movement pushed for and fought to maintain such a system, which has yet
to happen in the U.S.

In the words of Greg Shotwell, “The
only legitimate solution is universal health care. The UAW should take the lead
and refuse all concessions until all Americans have full and equal access to
health care.” Instead of using the lack of single-payer as an excuse for
concessions, as Gettelfinger does, the fight for it must begin with defense of
existing, contractual benefits.

Such a fight could put wind in the
sails of the reorganizing UAW dissident movement. Shotwell says union reformers
will soon “introduce a plan calling for a national pattern contract [at parts
companies], portability of pensions, a national benefits pool and preferential
hiring and transfer rights for UAW members.”

There’s still time to prepare for a
fight. Even if GM were to take unilateral action on June 30, the scheduled date
for the two-week summer shutdown normally would mean that plants reopen July 19.
Late June announcements by Ford of possible job cuts make even clearer the need
for industry-wide solidarity and mobilization.